Facebook set to lead the way in ‘social trading’

Social media platforms are dominating the headlines lately and are poised to start generating a lot of money. A US floral retailer (1-800-Flowers) has recently opened the first “facebook storefront” where users can buy and send flowers directly from facebook.

Instead of trying to drive traffic (i.e. consumers) from facebook toward the company website, 1-800-Flowers has decided to go seek out the customer where he or she prefers to spend time, i.e. on facebook rather than on a corporate website.

So far, businesses have mostly considered social media as an additional marketing tool, but this initiative indicates a possible way forward, namely the option of social platforms hosting online shopping sections and virtually (no pun intended!) transforming themselves into big online shopping malls as more and more businesses set up their own storefront and take advantage of this huge network to reach consumers.

Traditionally facebook has been dominated by young people, and it’s no secret that advertisers have long known about and targeted “tweens” (generally this is said to be children between 8 and 12 years old) for their staggering purchasing power. And just as the design of the basic facebook profile has evolved over time, so has its users. Facebook recently announced that it now boasts 250 million users, but what is perhaps more interesting is that the fastest growing demographic is 35+ year olds. Is this an indication that the techie crowd is approaching maturity? Take a moment to think about the purchasing power of 40-year olds.

Yes, exactly, that is some serious purchasing power. There is no doubt that companies, both offline and online, will put two and two together and realise the gargantuan opportunity offered up by applications such as facebook’s storefront (if they haven’t already!).

The UK internet watchdog, Ofcom, today released their annual report which indicates that, apart from food, Britons want to spend most of their money on technology such as mobiles, internet and TV. The report further states that some 19 million people in the UK, which represents 50% of internet users, visit facebook and spend on average six hours a month on the site, an increase of two hours per month compared to 2008. This means that the internet allows businesses to reach consumers with increasingly high purchasing power, even in the greatest recession since the 30s!

So the share of older people using facebook is growing massively, they have money to spend, and they want to stay wired-up even in times of economic hardship, and facebook has opened its door to businesses – should the likes of Jeff Bezos of Amazon.com be worried? Is social trading the right term to describe these commercial activities?